Frequently Asked Questions

An Asset Protection Trust (APT) is a type of ‘life interest trust’. When you protect your assets with an APT you grant yourself a life interest as the ‘principle beneficiary’ and then after your death, it becomes a ‘discretionary trust’ which holds the assets safely for your beneficiaries. At Westminster Wealth Preservation our team of solicitors and barristers are specialists in this area of Law and will draft a bespoke document specifically for you, to meet your and your family’s requirements.

Assets left to a beneficiary via a Will are highly likely to form part of the financial settlement with their husband or wife if they were to become divorced. In fact, even whilst you are still living, the inheritance a beneficiary is to receive in the future can be taken into consideration and a portion handed over when it is received.

Placing assets into Trust means that only those named as beneficiaries have any rights or access to those assets.

An APT drawn up for you by Westminster Wealth Preservation will protect your home, savings, other valuables and anything else you wish to include up to the Inheritance Tax Threshold of ￡325,000 for an individual, or ￡650,000 for a couple.

If the daughter-in-law were to remarry, those same inherited assets would normally be shared with her new partner. The grandchildren’s inheritance would be diluted further if the new partner had their own children. If the daughter-in-law did not outlive her new husband, the grandchildren could be completely disinherited.

If assets were placed into a Trust, you could ensure that the daughter-in-law had access to funds in order to look after the grandchildren until they became adults and prevent any new partners from having any access or rights to the inheritance.

Yes, you choose exactly what assets to protect, normally your home and savings, also antiques, art; any asset you own. Certain types of investments that are subject to Capital Gains Tax, such as shares and investment properties, will require special attention to avoid unnecessary taxation. It may also be necessary to change some of the methods you use to hold your savings, eg ISAs, but we will explain all that to you to ensure that the most tax-effective method is used.

If you wish to protect your home and other assets, the quicker you do so the better. None of us know what life may bring and so you should set up your Asset Protection Trust as soon as possible. The best time to set the Trust up is when you are in good health and living independently. Just as everyone should make a will, the APT is a comprehensive protection tool for anyone throughout life.

Yes, and it should be done as soon as possible. While you are still living in the family home it is treated as a disregarded asset. You are able to protect your share so that if you predecease your spouse it will prevent your share passing to your spouse and everything becoming available to the Local Authority for assessment.

The assets held within the Trust will still form part of your estate for Inheritance Tax purposes as they have been retained for your benefit. This is why we take care to keep the assets below the threshold. After your death, your Asset Protection Trust can become a very efficient tax saving tool for future generations. If your estate exceeds the Inheritance tax thresholds we can advise you how to avoid leaving a tax bill for your beneficiaries.

Depending on the assets that are placed in your Trust it may need to be registered with HMRC and if so, they will normally issue a tax return to your first named Trustee on an annual basis. We will advise you if this is necessary. The return only covers the Trust’s income, not your own personal affairs. On the 10th anniversary it will be assessed and if the trust exceeds the Inheritance Tax Threshold on that date, a tax charge of 6% per 10 years period will be applied to the excess. Therefore, we are careful not to transfer more than the IHT threshold into your Trust.

Yes, providing you meet the standard criteria set out by the equity release company. As with a mortgage, they will take first charge on your property and we will protect the remaining equity with your Trust.

Trusts are set up for 125 years. Trustees can close them at any time within that period. The Asset Protection Trust is designed to protect your wealth during your lifetime and your family’s wealth after your death. The assets can be distributed directly to your family after your death, but they also have the option to receive these as a ‘loan’ from your Trust, which then provides protection and tax advantages. We will explain all this to you.

Wills take care of the distribution of your assets to the people you want to benefit, not the protection of your assets. The Asset Protection Trust ensures that your assets are safe from attack during your lifetime, so that they are available for your loved ones on your death. The long delays and the professional fees associated with probate are both avoided for all the assets in your Trust.

For an estate that includes no property because it is held in trust, banks and building societies usually release money up to a certain threshold without requiring a grant of probate. For example with Santander, Lloyds TSB, Halifax and Barclays the limit is £50,000. Others are generally between £20,000 and £30,000.

Wills are still very important as they ensure that the rest of your estate, not held within the Trust, is distributed to your chosen beneficiaries and will include funeral directions, appointments of executors and guardians if needed.

If you are in business and would like to safeguard your personal assets from business debts, your Asset Protection Trust can keep them safe, as long as you are not already insolvent or about to be made bankrupt. Assets held within your Trust will be protected. If you die and one of your children has become bankrupt, the Trust can hold on to the money until such time as the bankruptcy has been discharged.